Product that will burden suppliers (inelastic supply) Factors Supportive Argument 1. 2. 3.

Product that will burden suppliers (inelastic supply)
Factors	Supportive Argument
1.
2.
3.

Expert Solution

Ans.) Inelastic supply is the type of elasticity in which the percentage change in supply is less than the percentage change in quantity.

Factors that lead to inelastic supply:

1.) Input constraints - As we know that the production of a good requires the inputs such as labor and capital at hand If a firm has sufficient labor but lack extra capital necessary for producing the good , then the supply of good becomes limited and thus leads to inelastic supply.

Similarly, if a firm does not have the sufficiebt raw materials to make good, then also it leads to the situation of inelastic supply.

2.) Product requiring specialized labor - The production of some products requires the specialization technique which only skilled labor has.If the labor in a firm is not specialized , then it cannot produce those products and thus their supply remains limited.

3.) Short-term : In the short term, a firm is constrained by the supply of limited capital and thus cannot increase its size immediately.This leads to the limited output of goods in the short term and thus inelastic supply.

Rahul Sunny answered 1 year ago

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